Analysts
Ready for Xoom Price Cut

However, Forrester Research
analyst Sarah Rotman Epps, who has repeatedly gone on record saying the Xoom
price point was too high from the start, said it's going to be tough for
Motorola, given the component costs, "but it would make the Xoom more
competitive with iPad 2."
Know what else would make
the Xoom more competitive to the iPad 2? More applications. Apple CEO Steve
Jobs gleefully pointed out at the iPad 2 launch that there are 100 Honeycomb
applications, compared with 65,000 for the iPad.

Gartner analyst Van Baker
believes that Apple's whole package with the iPad 2 is simply more attractive
to consumers than the Xoom.

"Android is way behind
Apple in the application space," Baker told eWEEK. "If you are
comparing OS features, then the gap is not as significant, but consumers are
not going to buy a tablet based on which OS it has."
Baker also argued that, by
pairing the Xoom with a 3G contract, Motorola and Verizon are approaching the
U.S. market the wrong way.
"The assumption by
Motorola is that everyone wants to have 3G connectivity. In the U.S., that has
not proven to be true. The percentage of tablet users that are actually
subscribing to data plans is relatively low as evidenced by the iPad shipments
versus the data plan signups that AT&T reported for the device in the last
quarter of 2010. If you are happy with WiFi, the iPad is much less expensive,
and most people are using the device where WiFi is readily available, such as a
living room, classroom, coffee shop, etc."

It's unlikely Motorola will
go long without a WiFi-only Xoom. Moreover, the Xoom won't cost $799 off
contract for long. Carriers cut their prices for the Samsung Galaxy Tab when it
didn't sell.
And now Samsung has said
it will reconsider the design and cost of its Honeycomb-based Galaxy Tab 10.1,
citing Apple's iPad 2 pricing.
Moreover, the market hasn't
even seen the RIM PlayBook or HP TouchPad ship, so it will be interesting to
see how those vendors price their tablets. Entering the tablet market and going
up against the iPad-and now the iPad 2-is not an enviable exercise.